The vast majority of small businesses get most of their customers through referrals.

Referrals are the leads that are most likely to close, and they are usually effectively free.

So why are you not doing more to increase the number of referrals you get?

The problem is that most people are reluctant to ask for referrals. It’s true for you (I’m sure it is!) – I know it’s true for me, and it’s almost certainly true for everyone who works for you.

But there are ways to generate more referrals that are practically painless. Let’s look at a couple of those…

1. Create a tag-team referral process

The best time to ask for a referral is right after someone has become a customer. They are enthusiastic about your company, and referring someone else to you validates and reinforces the decision they have just made. But sales reps can be very reluctant to ask for a favor at this point – they just got the purchase order and they don’t want to jeopardize that.

So make it easy for them. Set up a system where the sales rep calls to say thank you and tell them what the next steps are. Perhaps you need to schedule a kickoff call or meeting. Have the sales rep say that Sally will be calling to schedule the kickoff call, and when she does that she will also be asking if they know anyone else who might be able to use your solution.

That’s easy, right? Your sales rep is not asking for a referral. She is simply saying that in the future, they will be asked for a referral.

It’s easy for Sally too. Sally can now call and go through her checklist with them, schedule the meeting, and say that as Mary (your sales rep) may have mentioned, she would like to ask if they know of anyone else who might be able to use your solution. The question is no longer a loaded one, and it is not being sprung on them.

It’s easy for your customer too. They have had a chance to think about it, and if they know someone, chances are pretty good that they will have that person’s contact info handy. If not, they are prepared for the question and can graciously decline.

2. Have a scheduled referral contest

Let customers know that sales reps will be competing to see who can generate the most referrals in the month of April. That gives the customers a chance to think about it and be prepared for the question.

Then sales reps can email or call customers, tell them they’re trying to win, and ask if they know anyone. When it’s a game, it’s more fun to participate. And when you ask for referrals in a light-hearted way, it is easier for everyone.

3. Segment your referrals

Go through the following groups in your head, and try to find one individual or company in each group that might be interested in referring business back and forth. Then go ask them!
– Competitors
– Companies that sell products or services that are typically sold in conjunction with yours
– Companies that sell products or services that are typically needed before yours
– Companies that sell products or services that are typically needed after yours
– Consultants who work in your industry
– Service providers who work in your industry
– Accountants, lawyers, recruiters and other professionals who work in your industry

Yes, the first item on that list was competitors. Almost certainly your products or services are not identical. Each of you is stronger in certain areas. Refer business back and forth in the areas where you don’t overlap.

4. Consider other touchpoints

Where and when else do customers or prospects touch your company? Can you build in referral processes there? Here are a couple more places to look at:
– Your website (refer a friend button)
– Customer service/tech support (after the satisfactory resolution of their problem)
– Email marketing or email newsletters (ask recipients to forward the email)

If you work on adding one new referral source each month, in less than a year you will be generating a substantial number of new, high-quality leads.